Roles of Investment and Innovation in Business Cycle from Kalecki?s Perspective with a Schumpeterian Approach (An Empirical Analysis for Turkey and Greece)

Creative Commons License

AKTAKAS B. G. , AYTUN C. , Akın C. S.

Journal of Economic and Social Studies, vol.2, pp.1-17, 2012 (International Refereed University Journal)

  • Publication Type: Article / Article
  • Volume: 2
  • Publication Date: 2012
  • Title of Journal : Journal of Economic and Social Studies
  • Page Numbers: pp.1-17


Business cycles are one of the best sources to understand current situation
of a country’s economy. Michal Kalecki denotes investment as the best explanatory
for the dimension and reason of cycles; on the other hand Schumpeter considers
that innovation should be placed in a different position in this regard. In
addition, both Kalecki and Schumpeter verify that investment and innovation are
related with each other because innovation is also an important subject for
investment. It is expected that  investment and innovation have the effect in the
same direction on output.  In this study, business cycles have analyzed for 1971-
2009 period by using the yearly data in Turkey and Greece and it has been dealt
effects of investment and innovation on cyclical fluctuation. In this paper which
growth rates have been discussed, ordinary least square estimation method has
been used. In this respect firstly, it has been examined that the effect of innovation
on investment  and  income.  After that  examined that  effect of  investment  on
output and finally innovation and investment have been evaluated by considering
the effects on the output.   It has been found that the obtained results support the
views of Kalecki for both of the countries.